1
INTRODUCTION
It shall be the duty of the commissioner [of alcoholic beverage control] to supervise the
manufacture, distribution and sale of alcoholic beverages in such a manner as to promote
temperance and eliminate the racketeer and bootlegger.
N.J.S.A. 33:1-3 (1933)
In 1920, the United States embarked on a grand
moral experiment by prohibiting the manufacture
and sale of alcoholic beverages. The experiment,
known as Prohibition, was embodied in the 18th
Amendment to the Constitution. Prohibition’s
repeal in 1933 was an acknowledgement that the
experiment had failed. But the repeal was also
motivated by a recognition that the only group to
profit from Prohibition had been organized crime. In
fact, it can be argued that Prohibition was an impor-
tant economic breeding ground for organized crime
as we know it today.
It was for that reason that the New Jersey Legis-
lature made it clear in 1933 that “racketeers and
bootleggers” and others of ill repute were not wel-
come in the newly legalized alcoholic beverage in-
dustry at any level. Despite this statutory admoni-
tion, a handful of the nation’s biggest bootleggers
became legitimate, then created some of the largest
distilling companies in the world — companies that
are still giants in the industry today. So while
bootleggers themselves are no longer in the industry,
their corporate offspring are.
Just seven years ago the Legislature restated the
1933 policy and the mission of the state Division of
Alcoholic Beverage Control (ABC) regarding the
industry and the underworld:
To protect against the infiltration of the
alcoholic beverage industry by persons with
known criminal records, habits or associa-
tions .... N.J.S.A. 33:1-3.1(5).
Pursuant to that statute, the ABC adopted a
regulation designed to provide more detailed guid-
ance to licensees:
No licensee shall allow, permit or suffer in
or upon the licensed premises the habitual
presence of any known prostitute, gangster,
racketeer, notorious criminal, or other per-
son of ill repute. N.J.A.C. 13:2-23.5(a).
* * *
It was against this background that the State
Commission of Investigation began its inquiry into